Small Cap Real Estate Companies Returned 17% in Past 12 Months, REITs 15.2%: Equirus Capital

Mumbai, July 29, 2025: Financial services firm Equirus Securities has released a press note on the development in the real estate sector. Per the press note, small cap real estate companies have returned 17 per cent in the past 12 months. REITs accounted for almost 43 per cent of fund-raising via primary sources since FY18.

The total warehousing stock across the top eight Tier 1 cities has more than doubled since 2019 from around 213 mn sq ft (MSF) to 438 mn sq ft in 2024.

Small cap firms post highest returns

Small cap real estate companies have been the best-performing segment in the past 12 months, garnering 17 per cent returns, followed by REITs at 15.2 per cent, mid cap at 2.5 per cent, the benchmark index Sensex at a meagre 1.4 per cent whereas large cap real estate companies posted -2.9 per cent returns.

Taking a longer horizon, small cap listed real estate companies continue to be the best-performing segment since March 2021 followed by mid cap, large cap, benchmark Sensex and lastly REITs, which posted the lowest returns.

Since FY18, INR 723,310 million was raised in the real estate sector, out of which REITs accounted for over 43 per cent, around INR 312,413 million, followed by INR 204,370 million. 

Real estate companies raised over INR 26,000 crore via the capital market in the past 12 months.

Total warehousing stock has more than doubled since 2019

The warehousing sector has been expanding with emerging opportunities beyond the metros. The growth in the warehousing stock is fuelled by infrastructure upgrades, policy reforms and consumption surge in Tier 2 and 3 cities. The total stock reached 533 MSF in CY 2024 from 300 MSF in CY 2019.

Government schemes like GST, Gati Shakti, DFCs and UIDF have boosted warehousing expansion and connectivity. The growth is largely driven by e-commerce demand (nearly 60 per cent) coming from smaller cities. Warehousing demand is rapidly expanding beyond Tier 1 hubs.

Tier 2 and 3 cities contribute 95 MSF (18 per cent) of the total stock—a 4X increase since 2017. Grade A share in new absorption was 80 per cent in 2024 across the top eight Tier 1 cities. In emerging cities, Grade A constitutes 30 per cent of the stock, reflecting an occupier shift toward quality.